As OnLive and Gaikai are proving, cloud gaming -- that is, streaming gameplay from an external source rather than relying on local processing power -- is a reality. OnLive is already in the hands of consumers, GameStop's upcoming service has been demonstrated in public venues, and Gaikai is striking up some impressive partnerships with companies such as Walmart and Electronic Arts.

"Cloud gaming is the future," Crytek CEO Cevat Yerli recently told us, and he's not alone in these sentiments. But so far, the reality of cloud gaming has been in expensive dedicated datacenters, which may not be a viable solution if cloud gaming is to become something as prevalent as "the future."

The organizers of the upcoming Cloud Gaming USA 2011 expo got a number of industry experts to weigh in on the subject, asking if datacenters were completely necessary for cloud gaming or if games could be optimized for easier streaming at the development stage.

"It's our responsibility as publishers to look at the latency issue from all sides," said THQ's Brian Farrell, who admits that game makers can make games that are specifically tailored to streaming.

"Whether that means reducing the video resolution or coding specifically for an online game logic or adding more server locations, the potential solutions vary widely," he explained.

David Perry of Gaikai, which differentiates itself from OnLive by operating 24 datacenters as opposed to the latter's 3, stresses that they are the only solution.

"This is never going to be easy," he said. "Anybody that wants to stand up a real cloud network for gaming has to cover the world at a critically close proximity to the users."

A massive amount of datacenters is the only way to make cloud gaming a reality, says Perry, because "you're dealing with physics" and the limitations of the speed of light. OnLive CEO Steve Perlman recently told Gamasutra that the need for numerous datacenters was a "misconception."

Major game retailer GameStop recently purchased streaming technology company Spawn Labs, which has been working on an OnLive-like consumer-facing streaming service since last year.

According to GameStop's Tony Bartel, datacenters are a necessity, and the company thinks that it will solve latency with a large amount of them.

"We believe that our technology will get latency to a point where it's imperceptible even to a very discerning gamer," he said. "We're going to continue to drive that down, as I'm sure OnLive and Gaikai are."

Bartel, Perry and Farrell will all speak at the Cloud Gaming USA conference in September. The report that these interviews were published in is available for free at the conference website.

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